Universal vs. Nintendo Case - Gaming Historian

welcome to the gaming historian I thought I'd take a break from grading all these papers and let you know an interesting piece of video game history now back in 1982 Donkey Kong was on top of the video game world Nintendo had firmly put their foot in the North American video game market with this addictive arcade game you can see Saturday morning cartoons breakfast cereals even a board game was all based on Donkey Kong now despite all this success Nintendo was still a pretty small company and they found themselves up against Universal City Studios about a trademark violation on King Kong the universal vs. Nintendo Court case was a major turning point for Nintendo as well as an inspiration for other small companies around the world Nintendo took on a giant and won if Nintendo had lost this guy might not even exist today this is the story of Universal City Studios vs. Nintendo 1981 arcades are a big business and Nintendo has just released Donkey Kong the brainchild of Shigeru Miyamoto during this time tiger electronics the creators of those handheld games you usually find at Walmart took notice of Donkey Kong and how great of a game it was inspired they developed a game based on King Kong as a handheld as is standard in creating a product Tiger Electronics contacted Universal about making licensed King Kong games as handhelds the only other active license at the time was with a company that made King Kong costumes Universal did a trademark report on King Kong and found little this was all standard procedure and nothing seemed out of the ordinary Universal granted Tiger electronics the license in September of 1981 completely unaware of Donkey Kong the following year Universal performed another routine trademark report this time Donkey Kong came up because Nintendo and calico we're trying to reach an agreement for a cartridge license of the game the trademark report still saw nothing suspicious and dismissed Donkey Kong Sid Sheinberg however president of Universal Studios had other plans Shyne Berg and his lawyer Robert hadal tested a Donkey Kong machine and thought it infringed on King Kong Universal wanted in on the video game industry Warner had recently purchased Atari and Sega so why not Universal they were already big in the music and movie industry to get in Universal would use this copyright case against Coleco Sheinberg invited Arnold Greenberg president of Coleco to California to meet Greenberg assumed the meeting was about a potential venture with the two companies but instead Sheinberg confronted Greenberg about Donkey Kong Sheinberg stated we are going to sue you if you don't give us some kind of royalty on Donkey Kong this was bad news for Coleco as their console was going to be shipped with Donkey Kong prepackaged Universal agreed not to sue Coleco if they pay royalties on every cartridge sold and promised future ventures with Universal Coleco agreed after the behind-the-scenes deal was finished shine Berg's next move was to go after the remaining companies Universal contacted Nintendo and several companies that licensed Donkey Kong including Milton Bradley for their Donkey Kong board game and ralston purina for their Donkey Kong series Nintendo met with universal and Coleco on May 6 to discuss the trademark issue representing Nintendo was Minoru Arakawa head of operations for Nintendo of America and Howard Lincoln Nintendo's legal counsel robert haddle the lawyer for universal demanded Nintendo pay royalties on Donkey Kong Lincoln responded firmly with we are not going to buy the Brooklyn Bridge Lincoln claimed that Nintendo ran its own trademark search and had found many unlicensed uses of King Kong hadal replied that he had a chain of title and would send it immediately to nintendo this chain of title would prove universals claim to king kong hat 'l never sent the chain of title nintendo had no idea about the agreement made between Coleco and universal but lincoln knew something wasn't right when Coleco urged nintendo to give in to the demands of universal at the meeting our Cowell was shocked that Lincoln wanted to fight against Universal now remember Nintendo is still a relatively small company at this point and they're not really used to dealing with legal issues especially against a company such as Universal City Studios on May 21st Nintendo met with Universal one last time Shyne Berg assumed they wanted to negotiate but they were sorely mistaken after a small lunch and some small talk about Universal investing in Nintendo Lincoln broke the bad news to Universal after further investigation Nintendo had decided to not accept universals claim to King Kong and that Nintendo would not pay royalties Sheinberg was furious and famously shouted you'd better start saving money to pay your attorneys fees I view litigation as a profit Center On June 29 1982 Universal filed suit against Nintendo claiming ownership of King Kong and claiming Nintendo had infringed upon its trademark the remaining companies that had licensing deals with Nintendo all gave into Universal except for Milton Bradley and Ralston Purina which stayed with Nintendo Ralston Purina tried a five thousand dollar settlement but Sid Sheinberg found it the most stupid thing I have ever heard of and threw them out of his office the epic battle between David and Goliath was about to begin to represent Nintendo Lincoln hired John Kirby a lawyer with Latham and Watkins at first glance John Kirby didn't seem like a good lawyer to Howard Lincoln when I initially met him I wasn't all that impressed he was kind of disheveled looking and out of sorts but Kirby was one hell of a lawyer he had a reputation for defending his clients Adam li and had one big antitrust cases for Pepsi Howard Lincoln and John Kirby flew to Japan to speak with Hiroshi Yamauchi about the case Yamaguchi did not like lawyers and here he had to standing in front of him he made himself clear when he stated we must win after interviewing gunpei Yokoi creator of the Gameboy and Shigeru Miyamoto the creator of Donkey Kong and other staff members about the game the two headed back to the United States to prepare for the case then came the discovery that would change everything Howard Lincoln's instincts were correct Universal didn't own King Kong in fact they had recently won the court case proving that King Kong was in public domain they did this so they can make that 1970s remake of the original King Kong Lincoln also discovered the agreement between Universal and calico as well as Cheyne Berg's motives to enter the video game business and push away competitors these new motives made the case very clear because of his help and his firm decision to fight Universal Arakawa offered Howard Lincoln the job of senior vice president of Nintendo Lincoln who had been working almost exclusively with Nintendo anyways agreed and put in his thirty days notice at his law firm on December 7th the case took place in the New York courtroom of US District Court Judge Robert W sweet Nintendo had Jerry Mamata who was their market research analyst played Donkey Kong for the entire courtroom to show there was no infringement on King Kong the games were in the courtroom and and I played both Donkey Kong and Donkey Kong jr. you know in front of Judge sweet I guess the rest is history furthermore John Kirby presented a testimony from Shigeru Miyamoto who explained that he initially named the ape character King Kong simply because King Kong was a generic term in Japan for menacing ape John Kirby also brought up the older court cases that Universal filed to prove that King Kong was public main in that Universal had filed this suit knowing they did not own the rights to King Kong he also mentioned Sheinberg statement of viewing litigation as a profit Center judge Robert W sweet had heard enough he concluded that Nintendo did not infringe on universals rights because they did not even own the rights and even if they did own the rights the game Donkey Kong had nothing to do with King Kong so he criticized Universal for even bringing this case to court knowing full well they did not own the rights to King Kong and thus Nintendo would be awarded damages now Universal would appeal this case several times all the way to the US Supreme Court but they failed Nintendo was awarded one point eight million dollars soon after all the companies at at licensed Donkey Kong began suing Universal trying to get the royalties back that they paid to them this included Coleco and Atari Universal settled with most of them this case not only gave Nintendo a hefty amount of money but it also established them as a legitimate company and one that could handle themselves against the bigger companies it was an inspiration to not only the video game industry but any small company trying to make it so what happened next for everyone involved Howard Lincoln continued to work with Nintendo for several more years becoming chairman in 1994 after leaving Nintendo he took over as chairman of the Seattle Mariners baseball team which is owned by Nintendo John Kirby was rewarded with his own sailboat christened Donkey Kong many say he is also the inspiration for the Nintendo character Kirby he continued his job for many more years before retiring in 2007 Coleco would soon leave the video game industry and begin selling dolls the company closed its doors in 1989 and as for Universal still hoping to enter the video game business they bought a small company known as LJ n to create video games in 1994 they created their own game studio you versal interactive which published games such as Spyro the Dragon and Crash Bandicoot in December of 2000 they were acquired by Vivendi and as for Nintendo well you know

Channel: Gaming Historian

Views: 474,976

Rating: 4.948163 out of 5

Keywords: Universal vs Nintendo Case, Universal vs Nintendo, Donkey Kong (Video Game), Nintendo (Video Game Developer), Nintendo, Donkey Kong, John Kirby, Gaming Historian, Video Game History, Howard Lincoln, Video Game Industry (Industry)

Id: JeKYPic50h4

Length: 12min 46sec (766 seconds)

Published: Tue Apr 02 2013

Reddit Comments

[u/grump500]

And now Universal Studios and Nintendo are working together to build Nintendo World... How things change, huh?

[u/darwin-rover]

The Nintendo character Kirby was named after the lawyer that defended them in this case

https://en.wikipedia.org/wiki/John_Kirby_(attorney)

[u/rocking9]

For those who don't have time to watch the video, it was Universal themselves that proved King Kong was public domain in a court case against RKO General. Nintendo found out about this and easily won.

[u/nascarracer99316]

Wow so both warner music and universal studios have something in common.

They both charged people to use something they claimed they owned but which were really in the public domain and people who did not want to pay they sued them for it.

For warner music it was the song happy birthday and for universal studios it is king kong.

[u/AyeAyeLtd]

That's so dumb. Wouldn't this be literally the first thing Universal's lawyers look at when advising about whether the suit should be filed or not? Of course you can't sue for a trademark (or other IP) you don't own.

[u/hornplayerKC]

Just an FYI, The Gaming Historian is a fantastic channel if you're interested in video game history!

[u/[deleted]]

The last time this was posted, it was noted that Nintendo successfully countersued Universal for $1.8 million. https://en.wikipedia.org/wiki/Universal_City_Studios,_Inc._v._Nintendo_Co.,_Ltd.#Counterclaims_and_second_appeal

[u/Flemtality]

TIL I have been watching Norm for ever four and a half years at this point.

[u/negomimi]

And then Nintendo threatened to sue people streaming.